New Delhi, Sept. 17 -- One 97 Communications Ltd's (Paytm) stock has gained nearly 3% since 15 September when the National Payments Corporation of India (NPCI) announced a new merchant discount rate (MDR) framework for UPI transactions. Investors celebrated the move from a largely subsidy-based model towards a contractual and scalable revenue model.

Effective 15 October, a 0.4% MDR will apply to eligible person-to-merchant (P2M) UPI transactions above Rs.2,000, subject to a Rs.300 cap, and concessional rates for specified sectors. But the eventual benefits accruing to Paytm will depend on how MDR is distributed, and how the eligible UPI pool shrinks with concessions and caps.

The headline 0.4% is not Paytm's revenue, as the MDR has to b...